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DERIVATIVE FINANCIAL INSTRUMENTS
 12 Months Ended
Dec. 31, 2020
Disclosure of detailed information about financial instruments [abstract]  
DERIVATIVE FINANCIAL INSTRUMENTS DERIVATIVE FINANCIAL INSTRUMENTS
The company’s activities expose it to a variety of financial risks, including market risk (i.e. currency risk, interest rate risk and other price risk), credit risk and liquidity risk. The company selectively uses derivative financial instruments principally to manage these risks.
The aggregate notional amount of the company’s derivative positions at December 31, 2020 and 2019 is as follows:
AS AT DEC. 31 (MILLIONS)Note20202019
Foreign exchange(a)$39,284 $37,334 
Interest rates(b)61,111 51,619 
Credit default swaps(c)— 39 
Equity derivatives(d)2,081 2,517 
Commodity instruments(e)20202019
Energy (GWh)27,564 25,136 
Natural gas (MMBtu – 000’s)121,468 78,364 
a)    Foreign Exchange
The company held the following foreign exchange contracts with notional amounts at December 31, 2020 and 2019:
Notional Amount
(U.S. Dollars)
Average Exchange Rate
(MILLIONS)2020201920202019
Foreign exchange contracts
Canadian dollars$7,539 $6,839 0.76 0.75 
British pounds3,986 7,874 1.31 1.27 
European Union euros4,561 2,069 1.17 1.16 
Australian dollars2,632 3,989 0.69 0.71 
Indian rupee1,288 240 77.56 73.55 
Chilean peso159 548 770.89 722.08 
Korean won1
700 687 1,175 1,173 
Chinese yuan1
1,633 1,862 7.05 5.42 
Japanese yen1
212 111 105.82 104.58 
Colombian pesos1
96 534 3,621 3,416 
Brazilian reais276 484 0.19 0.24 
Swedish krona1,647 1,578 8.58 9.10 
Other currencies903 584 VariousVarious
Cross currency interest rate swaps
Canadian dollars6,868 4,493 0.77 0.77 
European Union euros1,914 103 1.06 1.09 
Australian dollars1,374 2,033 0.53 0.98 
Japanese yen1
750 18 113.33 110.00 
British pounds275 267 1.49 1.49 
Colombian pesos1
88 100 3,880.00 3,463 
Foreign exchange futures
   Brazilian reais105 38 0.19 0.25 
Foreign exchange options
British pounds— 1,338 — 1.43 
Canadian dollars2,030 — 0.74 — 
European Union euros245 1,544 1.17 1.12 
1.Average rate is quoted using USD as base currency.
Included in net income are unrealized net losses on foreign currency derivative contracts amounting to $41 million (2019 – gain of $201 million) and included in the cumulative translation adjustment account in other comprehensive income are gains in respect of foreign currency contracts entered into for hedging purposes amounting to $28 million (2019 – losses of $409 million).
b)    Interest Rates
At December 31, 2020, the company held interest rate swap and forward starting swap contracts having an aggregate notional amount of $30.2 billion (2019 – $25.0 billion), interest rate swaptions with an aggregate notional amount of $3.9 billion (2019 – $nil) and interest rate cap contracts with an aggregate notional amount of $27.0 billion (2019 – $26.6 billion).
c)    Credit Default Swaps
As at December 31, 2020, the company held credit default swap contracts with an aggregate notional amount of $nil (2019 –$39 million). Credit default swaps are contracts which are designed to compensate the purchaser for any change in the value of an underlying reference asset, based on measurement in credit spreads, upon the occurrence of predetermined credit events. The company has no outstanding payments to make or receive in the event of a predetermined credit event in 2020 (2019 – $nil).
d)    Equity Derivatives
At December 31, 2020, the company held equity derivatives with a notional amount of $2.1 billion (2019 – $2.5 billion) which includes $1.3 billion (2019 – $541 million) notional amount that hedges long-term compensation arrangements. The balance represents common equity and ETF positions established in connection with the company’s investment activities. The fair value of these instruments was reflected in the company’s consolidated financial statements at year end.
e)    Commodity Instruments
The company has entered into energy derivative contracts primarily to hedge the sale of generated power. The company endeavors to link forward electricity sale derivatives to specific periods in which it expects to generate electricity for sale. All  energy derivative contracts are recorded at an amount equal to fair value and are reflected in the company’s consolidated financial statements. The company has financial contracts outstanding on 121,468,000 MMBtu’s (2019 – 78,364,000 MMBtu’s) of natural gas as part of its electricity sale price risk mitigation strategy.
Other Information Regarding Derivative Financial Instruments
The following table classifies derivatives elected for hedge accounting during the years ended December 31, 2020 and 2019 as either cash flow hedges or net investment hedges. Changes in the fair value of the effective portion of the hedge are recorded in either other comprehensive income or net income, depending on the hedge classification, whereas changes in the fair value of the ineffective portion of the hedge are recorded in net income:
20202019
FOR THE YEARS ENDED DEC. 31
(MILLIONS)		NotionalEffective PortionIneffective PortionNotionalEffective PortionIneffective Portion
Cash flow hedges1
$39,128 $(479)$10 $32,709 $(89)$20 
Net investment hedges
17,788 182 10 22,790 (433)16 
$56,916 $(297)$20 $55,499 $(522)$36 
1.Notional amount does not include 13,950 GWh, 82,663 MMBtu – 000’s and 1,302 bbls – millions of commodity derivatives at December 31, 2020 (2019 – 14,485 GWh, 12,164 MMBtu – 000’s and 2,273 bbls – millions).
The following table presents the change in fair values of the company’s derivative positions during the years ended December 31, 2020 and 2019, for derivatives that are fair valued through profit or loss, and derivatives that qualify for hedge accounting:

(MILLIONS)		Unrealized Gains During 2020Unrealized Losses During 2020Net Change During 2020Net Change During 2019
Foreign exchange derivatives$419 $(460)$(41)$201 
Interest rate derivatives110 (337)(227)(221)
Credit default swaps— — — (1)
Equity derivatives1,161 (311)850 13 
Commodity derivatives
44 (86)(42)27 
$1,734 $(1,194)$540 $19 

The following table presents the notional amounts underlying the company’s derivative instruments by term to maturity as at December 31, 2020 and 2019, for derivatives that are classified as fair value through profit or loss, and derivatives that qualify for hedge accounting:
20202019
AS AT DEC. 31 (MILLIONS)<1 Year1 to 5 Years>5 Years
Total Notional
Amount
Total Notional
Amount
Fair value through profit or loss
Foreign exchange derivatives$6,891 $5,158 $129 $12,178 $7,946 
Interest rate derivatives13,158 12,308 1,614 27,080 22,731 
Credit default swaps— — — — 39 
Equity derivatives1,216 865 — 2,081 2,517 
Commodity instruments
Energy (GWh)4,406 9,207 — 13,613 10,652 
Natural gas (MMBtu – 000’s)34,572 4,233 — 38,805 66,200 
Elected for hedge accounting
Foreign exchange derivatives$13,498 $12,086 $1,522 $27,106 $29,387 
Interest rate derivatives7,738 22,054 4,240 34,032 28,888 
Equity derivatives— — — — — 
Commodity instruments
Energy (GWh)
5,562 5,066 3,322 13,950 14,485 
Natural gas (MMBtu – 000’s)51,034 31,630 — 82,664 12,164